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Arbitration Appeal No:: 23 / 2016.

MP Road Development Corporation Limited Vs. M/s Jabalpur Corridor (India) Pvt Ltd.

8. As far as limitation is concerned, it is argued that the termination of agreement took place on 12.7.2007 and therefore, the proceedings initiated for arbitration on 14.2.2011 which is beyond three years and seven months is barred by limitation and by treating the claim submitted in the year 2008 i.e. 18.7.2008 to be the cut-off date for calculating the period of limitation, it is argued that a patent illegality has been committed by the Arbitrator and the Trial Court. It was vehemently argued that the cut-off date for counting limitation has to be 12.7.2007 and not 18.7.2008 when the claim for 'termination payment' was made by the respondent concessionaire. Placing reliance on the following four judgments : S. Rajan Vs. State of Kerala and another - (1992)3 SCC 608; State of Orissa and Ors. Vs. Damodar Das - (1996)2 SCC 216; Sunder Lal Khatri and Sons Vs. DDA (Delhi High Court) & Board of Trustees of Port of Kandla Vs. Hargovind Jasraj & Anr. -(2013)3 SCC 182, it was argued that the Tribunal has committed an error in holding the claim to be within limitation. It was thereafter, argued that the award as passed by the majority of arbitrators is vitiated by bias. It is said that one of the arbitrator, namely Shri R. C. Chug's had bias and prejudice towards the appellant in as much as Shri Chug and his son, one Shri Arun Chug were associated with the activities of the respondent corporation and because the appellant corporation had terminated the services of Shri Arun Chug, the Arbitrator Shri R. C. Chug has bias and therefore, on this count the entire award stands vitiated and for the bias of arbitrator, reliance is placed upon the following judgments : Jiwan Kumar Lohia and Anr. Vs. Durga Dutt Lohia and Ors. - (1992)1 SCC 56; K.C. Mehra Vs. Satish Mehra - (2009) 161 DLT 361 & Bihar State Mineral Development Corporation and Anr. Vs. Encon Builders - (2003)7 SCC 418.

MP Road Development Corporation Limited Vs. M/s Jabalpur Corridor (India) Pvt Ltd.

payable for 'termination payment'. It is stated that the respondent did not claim reinstatement into the project but on 18.7.2008 gave up all their claim for challenging to the termination and sought 'termination payment'. The request and claim made on 18.7.2008 was followed by reminders dated 14.10.2008 vide Exhibit P/308 and on 7.1.2009 representatives of both the parties met and attempted for an amicable resolution but finally on 16.1.2009 for the first time vide Exhibit P/311 M.P. Road Development Corporation ltd., refused 'termination payment' and according to Shri Tankha it is then that the cause of action arose. Thereafter, the work was awarded to another contractor M/s Essel Group to the tune of Rs.328.63 Crores and when the dispute could not be resolved amicably from the date of raising of the claim for 'termination payment' on 18.7.2008, on 5.4.2011 vide Exhibit P/315 the Arbitral Tribunal was constituted under the Act of 1996 and the claim and other documents were presented by the claimant/ Contractor before the Arbitration Tribunal for payment as contemplated under the agreement and in the counter claim raised by M.P. Road Development Corporation on 27.3.2012 no objection as raised now, were made. Shri Tankha referred to the various documents and proceedings of the Arbitral Tribunal to rebut the contention of the appellants, particularly, with regard to bias of the arbitrator, limitation, referred to pendency of the matter before the High Court in the Writ Petition and tried to argue that the matter was taken up by the arbitrators and the award has been passed in accordance to the requirement of law and there is no illegality in the same. He also filed a detailed written argument to rebut each and every contention advanced by the learned counsel appearing for the appellant. He argued that a reasonable and concurrent findings recorded by the Arbitral Tribunal and the trial Court under Section 34 cannot be interfered with now in exercise of the limited appellate jurisdiction available to this Court under Section 37 of the Act of 1996 and on this count reference to a recent judgment of Supreme Court in the case of Harish Chandra & Company Vs. State of U.P. - (2016)9 SCC 478 to Arbitration Appeal No:: 23 / 2016.

30. The first and the foremost ground canvassed by Shri Naman Nagrath, learned Senior advocate, was by contending that a question or Arbitration Appeal No:: 23 / 2016.

MP Road Development Corporation Limited Vs. M/s Jabalpur Corridor (India) Pvt Ltd.

disputes not referred for arbitration have been awarded under the heading „Debts Due‟ and „Cost of Machinery‟ and by travelling beyond the statement of claim, award has been made by the Tribunal. According to learned Senior Advocate this violates the provision of Section 34(2)(a)(iv), of the Act of 1996.

43. That apart, in the case of Swan Gold Mining Limited (supra) relied upon by Shri Vivek Tankha, in paragraphs 11, 12 and 19, the following principle are laid down:-

Arbitration Appeal No:: 23 / 2016.

MP Road Development Corporation Limited Vs. M/s Jabalpur Corridor (India) Pvt Ltd.

"11. Section 34 of the Arbitration and Conciliation Act, 1996 corresponds to Section 30 of the Arbitration Act, 1940 making a provision for setting aside the arbitral award. In terms of sub-section (2) of Section 34 of the Act, an arbitral award may be set aside only if one of the conditions specified therein is satisfied. The Arbitrator‟s decision is generally considered binding between the parties and therefore, the power of the Court to set aside the award would be exercised only in cases where the Court finds that the arbitral award is on the fact of it erroneous or patently illegal or in contravention of the provisions of the Act. It is a well settled proposition that the Court shall not ordinarily substitute its interpretation for that of the Arbitrator. Similarly, when the parties have arrived at a concluded contract and acted on the basis of those terms and conditions of the contract then substituting new terms in the contract by the Arbitrator or by the Court would be erroneous or illegal.